'Unjust agreement not binding on consumer'

An agreement between a service provider and a consumer that is based on unjust and unreasonable terms is not legally binding on the consumer, the Pune district consumer disputes redressal forum held here recently.August 26, 2015, 18:55 IST

Continuing with its focus on Africa, FMCG firm Godrej Consumer Products Ltd today hiked its stake in hair extension brand Darling South Africa.PUNE: An agreement between a service provider and a consumer that is based on unjust and unreasonable terms is not legally binding on the consumer, the Pune district consumer disputes redressal forum held here recently.

A three-member bench of the forum, headed by its president V P Utpat, has ordered property developer N S Gaikwad of NSG Development Corporation in Aundh to refund Rs 3,80,880 along with Rs 30,000 as costs to Dhule resident Ashish Prakash Chaudhari for deficiency in service. The builder had refused to execute an agreement with Chaudhari for the sale of a flat in his scheme in Narhe after collecting an advance of Rs 1 lakh through cheque and Rs 2,80,880 in cash for the agreement from Chaudhari.

During the hearing of the consumer complaint, the builder denied having received the cash from Chaudhari and maintained that the advance money receipt clearly mentioned that money once paid will not be refunded. He argued that the complainant was well aware of the terms and had agreed to them. Hence, he was not bound to pay any money to Chaudhari, he said.

The forum, which also comprised Mohan Patankar and Kshitija Kulkarni as members, dismissed the builder's argument on the grounds that the terms of the advance money receipt, which the builder claimed was an agreement between him and the complainant, were unjust, unreasonable and not legally tenable. The forum relied on a 1991 judgment by the state consumer disputes redressal commission in the Angela Fonseca vs Coral Lawns case.

In April 2013, Chaudhari agreed to purchase an 869sqft flat in the NSG Crown apartment scheme in Narhe at the rate of Rs 4,600 per square foot. The total consideration payable for the flat was over Rs 48.06 lakh. Chaudhari issued a Rs 1 lakh cheque on April 30, 2013, to the builder as an advance to book the flat and the latter issued a receipt. On June 26, 2013, he paid Rs 2,80,880 in cash to the builder for the purpose of executing an agreement of sale in relation to the flat. The builder then gave a written acknowledgment of having received the cash on the back of the advance money receipt. However, the builder did not take any action to enter into the agreement and kept the matter pending.

Owing to the delay, Chaudhari decided to cancel the deal and demanded a refund of the Rs 3,80,880. The builder did not refund the money, despite getting three letters and subsequently a legal notice through Chaudhari's lawyer. This prompted Chaudhari to file a consumer complaint on May 8, 2014, demanding Rs 5 lakh compensation apart from the refund of Rs 3,80,880, Rs 50,000 as damages and Rs 20,000 for the legal cost incurred.

The forum partly allowed the complainant's plea, while observing that the builder had provided deficient service by not responding to Chaudhari's letters and legal notice. It ruled that the builder must refund the Rs 3,80,800 and Rs 30,000 as costs to the complainant within six weeks from the receipt of the order. If he defaults, he must pay 9% interest till realisation.